Question 1

A personal cash flow statement presents income and outflows of cash for a given time period,such as a month.

Accepted Answer

A) True 
 B)False

Question 2

Opportunity costs refer to:

Accepted Answer

A)  current spending habits.
B)  changing economic conditions that affect a person's cost of living.
C)  storage facilities to make financial documents easily available.
D)  trade-offs associated with financial decisions.
E)  avoiding the use of consumer credit.F) A) and E)
G) A) and C)

Question 3

Ed Bostrom wants to reduce his fixed expenses.Which action would be appropriate?

Accepted Answer

A)  get a part-time job
B)  eat more meals at home rather than in restaurants
C)  find a place to live with a lower rent
D)  save more money for the future
E)  buy on credit items than might cost more laterF) A) and B)
G) A) and C)

Question 4

Samuel Jackson has developed a budget that he follows each month.This is a budget that he keeps in his head.He does not write anything down,nor does he use a computer to keep track of this budget.What type of budget has Samuel created?

Accepted Answer

A)  mental budget
B)  physical budget
C)  written budget
D)  computerized budget
E)  none of the aboveF) C) and E)
G) A) and E)

Question 5

Insolvency is a result of having more liabilities than assets.

Accepted Answer

A) True 
 B)False

Question 6

Take-home pay is a person's earnings after deductions for taxes and other items.

Accepted Answer

A) True 
 B)False

Question 7

Katherine Kocher has determined the following information about her own financial situation.Her checking account is worth $850 and her savings account is worth $1,200.She owns her own home that has a market value of $98,000.She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300.She has a car worth $12,500.She has recently purchased a 2-year certificate of deposit worth $5,500 and she has a retirement account worth $38,550.What is the total value of her assets?

Accepted Answer

A)  $127,850
B)  $98,000
C)  $168,600
D)  $159,900
E)  $171,900F) A) and D)
G) B) and E)

Question 8

This month,Ken Grossman has cash inflows of $3,100 and cash outflows of $2,950,resulting in a

Accepted Answer

A)  balanced budget.
B)  surplus of $150.
C)  deficit of $150.
D)  surplus of $3,100.
E)  deficit of $2,950.F) D) and E)
G) A) and D)

Question 9

Opportunity costs are only associated with money management decisions involving long-term financial security.

Accepted Answer

A) True 
 B)False

Question 10

Which one of the following illustrates an insolvent situation?

Accepted Answer

A)  assets $56,000;annual expenses $60,000
B)  assets $78,000;net worth $22,000
C)  liabilities $45,000;net worth $6,000
D)  assets $40,000;liabilities $45,000
E)  annual cash inflows $45,000;liabilities $50,000F) C) and E)
G) All of the above

Question 11

A home file should be used for:

Accepted Answer

A)  storing all financial documents and records.
B)  financial records for current needs.
C)  documents that require maximum security.
D)  obsolete financial documents.
E)  records that are difficult to replacE.F) A) and C)
G) A) and B)

Question 12

Katherine Kocher has determined the following information about her own financial situation.Her checking account is worth $850 and her savings account is worth $1,200.She owns her own home that has a market value of $98,000.She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300.She has a car worth $12,500.She has recently purchased a 2-year certificate of deposit worth $5,500 and she has a retirement account worth $38,550.What is the value of her liquid assets?

Accepted Answer

A)  $2,050
B)  $98,000
C)  $27,800
D)  $44,050
E)  $171,900F) A) and D)
G) B) and D)

Question 13

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due in the near future?

Accepted Answer

A)  budget variance
B)  investment assets
C)  long-term liabilities
D)  current assets
E)  current liabilitiesF) B) and D)
G) B) and E)

Question 14

Jerry Allison needs to store the title to his car and his house.Where is the most appropriate place for Jerry to store this information?

Accepted Answer

A)  home file cabinet
B)  safe deposit box
C)  personal computer
D)  best friend's house
E)  None of the aboveF) All of the above
G) A) and D)

Question 15

Kyle Burroughs has decided to put $25 more per week in his savings account.He knows this will reduce his ability to go out to eat each week but thinks building his savings is important.This would be an example of:

Accepted Answer

A)  a budget variance.
B)  an opportunity cost.
C)  a balance sheet.
D)  an accounting error.
E)  a budget anomaly.F) None of the above
G) A) and B)

Question 16

A common deduction from a person's paycheck is for:

Accepted Answer

A)  interest.
B)  taxes.
C)  rent.
D)  unemployment.
E)  current liabilities.F) A) and E)
G) A) and C)

Question 17

An investment account that increases from $1,000 to $1,005 in a month is earning approximately __ percent annual interest.

Accepted Answer

A)  0.5%
B)  5.0%
C)  6.0%
D)  10.0%
E)  11.0%F) A) and B)
G) B) and C)

Question 18

If expenses for a month are greater than income,an increase in net worth will result.

Accepted Answer

A) True 
 B)False

Question 19

Financial records that are referred to on a regular basis should be kept in a safe-deposit box.

Accepted Answer

A) True 
 B)False

Question 20

A decrease in net worth could be the result of:

Accepted Answer

A)  income exceeding expenses for a month.
B)  expenses exceeding income for a month.
C)  assets exceeding expenses.
D)  increased earnings on the job.
E)  income and expenses being equal for a month.F) A) and E)
G) A) and D)

Exam 3: Money Management Strategy: Financial Statements and Budgeting

Take-home pay is a person's earnings after deductions for taxes and other items.

Correct Answer
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Opportunity costs are only associated with money management decisions involving long-term financial security.

Correct Answer
verified

A decrease in net worth could be the result of:

Correct Answer
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Correct Answer
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A home file should be used for:

Correct Answer
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Which one of the following illustrates an insolvent situation?

Correct Answer
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Insolvency is a result of having more liabilities than assets.

Correct Answer
verified

If expenses for a month are greater than income,an increase in net worth will result.

Correct Answer
verified

Correct Answer
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Jerry Allison needs to store the title to his car and his house.Where is the most appropriate place for Jerry to store this information?

Correct Answer
verified

Samuel Jackson has developed a budget that he follows each month.This is a budget that he keeps in his head.He does not write anything down,nor does he use a computer to keep track of this budget.What type of budget has Samuel created?

Correct Answer
verified

Ed Bostrom wants to reduce his fixed expenses.Which action would be appropriate?

Correct Answer
verified

An investment account that increases from $1,000 to $1,005 in a month is earning approximately __ percent annual interest.

Correct Answer
verified

A common deduction from a person's paycheck is for:

Correct Answer
verified

A personal cash flow statement presents income and outflows of cash for a given time period,such as a month.

Correct Answer
verified

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due in the near future?

Correct Answer
verified

Opportunity costs refer to:

Correct Answer
verified

Financial records that are referred to on a regular basis should be kept in a safe-deposit box.

Correct Answer
verified

Kyle Burroughs has decided to put $25 more per week in his savings account.He knows this will reduce his ability to go out to eat each week but thinks building his savings is important.This would be an example of:

Correct Answer
verified

This month,Ken Grossman has cash inflows of $3,100 and cash outflows of $2,950,resulting in a

Correct Answer
verified

Exam 3: Money Management Strategy: Financial Statements and Budgeting

Take-home pay is a person's earnings after deductions for taxes and other items.

Correct AnswerverifiedShow Answer

Opportunity costs are only associated with money management decisions involving long-term financial security.

Correct AnswerverifiedShow Answer

A decrease in net worth could be the result of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A home file should be used for:

Correct AnswerverifiedShow Answer

Which one of the following illustrates an insolvent situation?

Correct AnswerverifiedShow Answer

Insolvency is a result of having more liabilities than assets.

Correct AnswerverifiedShow Answer

If expenses for a month are greater than income,an increase in net worth will result.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Jerry Allison needs to store the title to his car and his house.Where is the most appropriate place for Jerry to store this information?

Correct AnswerverifiedShow Answer

Samuel Jackson has developed a budget that he follows each month.This is a budget that he keeps in his head.He does not write anything down,nor does he use a computer to keep track of this budget.What type of budget has Samuel created?

Correct AnswerverifiedShow Answer

Ed Bostrom wants to reduce his fixed expenses.Which action would be appropriate?

Correct AnswerverifiedShow Answer

An investment account that increases from $1,000 to $1,005 in a month is earning approximately __ percent annual interest.

Correct AnswerverifiedShow Answer

A common deduction from a person's paycheck is for:

Correct AnswerverifiedShow Answer

A personal cash flow statement presents income and outflows of cash for a given time period,such as a month.

Correct AnswerverifiedShow Answer

Ben Chase needs to pay off some of his debts over the next few months.Which item on his balance sheet would help him decide what amounts are due in the near future?

Correct AnswerverifiedShow Answer

Opportunity costs refer to:

Correct AnswerverifiedShow Answer

Financial records that are referred to on a regular basis should be kept in a safe-deposit box.

Correct AnswerverifiedShow Answer

Kyle Burroughs has decided to put $25 more per week in his savings account.He knows this will reduce his ability to go out to eat each week but thinks building his savings is important.This would be an example of:

Correct AnswerverifiedShow Answer

This month,Ken Grossman has cash inflows of $3,100 and cash outflows of $2,950,resulting in a

Correct AnswerverifiedShow Answer

Correct Answer
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